Your going down there and doing what little you can, while nice, is like giving a beggar a dollar, and thinking you've done something worthy. You haven't. What needs to be done is to make the governments that are part of an oligarchy, understand that it has to stop, and that their people need to have a more equal part in the economic life of their countries. That's far more difficult. When far left wing governments take over, as they have in a few countries down there, things actually get worse.

Meanwhile, families need to put food on the table, and the only way they can feed all their mouths is to make as many of them that can, work. It's sad, but it's still true. And platitudes don't help.

With all due respect Mel. you do not know what you are talking about with regards to Central America. Sure Nicaragua has problems but Costa Rica , Guatemala and Panama have very vibrant economies and are very focused on education, human rights and there is very little corruption compared to just a decade ago. We are very close to making a big difference in the lives of the impoverished communities and especially in the coffee growing regions there are significant improvements. I'm in constant contact with major interests in that region and I wish you would stop characterizing me as some clueless bleeding heart American who send a few charitable donations. I am significantly involved in this program and I honestly find your flippant dismissal as insulting.

Software margins can be as high as 90%, if paper manuals, disks, packaging, shipping, etc. Isn't required. MS has much higher margins because they are mostly a software company.

It can also be said that software companies rip off their customers with those high margins, and perhaps that's so, but whether it is true or not, the margins are very high if the company is successful.

That's all true, but another aspect you missed out is that Microsoft keeps all their revenue as their at the end of the chain. Apple on the other hand has to pay suppliers for parts and assembly of their products.

Quote:

Originally Posted by neiltc13

Microsoft is still doing very well. They're making the best products they ever have done, such as:

Dont forget...
- Sharepoint which gains 20,000 users every day
- Dynamics which is growing faster than Salesforce
- Windows automotive which is already in Ford's, Fiats, and Kias
- Windows Embedded that powering far more things than you would expect
- Windows Azure, still in it's early days but even Pixar built their new rendoring platform on it
- Bing that despite all odds is actually gaining decent market share
- Lastly all those patents that are meaning Androids becoming expensive to implement due to MS's fee

Quote:

Originally Posted by anonymouse

IBM makes more money than they used to, too, but they no longer rule the tech world. Microsoft may continue making lots of money for a long time, but they are no longer any sort of force in the industry.

And who is exactly?

Apple? The Mac share of the market is still a small fish in a big pond. iOS is amazingly successful but that's only comparible to Windows Phone which wasn't ever that successful.

Google? Aside from search what have they done. We've been hearing for almost a decade about how there Microsoft's biggest threat but Bing seems to be having a bigger impact against their search business, rather than Google Doc's defeating Office.

It amazes me that we still see these serious comparisons between Microsoft and Apple, yet hardly any between Apple and their biggest competitors. The fact Microsoft is still increasing it's profits, breaking sales records and setting a world record for the fastest selling electronic consumer device at the same time as Apple is also doing the same, kinda proves these companies don't compete in the same market.

Apple is primeraly a Phone and MP3 player manufacturer
Microsoft is a Software producer

Apple? The Mac share of the market is still a small fish in a big pond. iOS is amazingly successful but that's only comparible to Windows Phone which wasn't ever that successful.

Google? Aside from search what have they done. We've been hearing for almost a decade about how there Microsoft's biggest threat but Bing seems to be having a bigger impact against their search business, rather than Google Doc's defeating Office.

It amazes me that we still see these serious comparisons between Microsoft and Apple, yet hardly any between Apple and their biggest competitors. The fact Microsoft is still increasing it's profits, breaking sales records and setting a world record for the fastest selling electronic consumer device at the same time as Apple is also doing the same, kinda proves these companies don't compete in the same market.

Apple is primeraly a Phone and MP3 player manufacturer
Microsoft is a Software producer

You've apparently taken off your blinders and replaced them with a blindfold. Anyone who's claiming that Apple is not a force driving the tech industry is completely out of touch. And Google, much as I dislike them, is, unarguably, as well. It's not an issue of where they, or anyone directly competes with Microsoft, it's an issue of which companies are driving the leading edge of technology, and Microsoft is indisputably not one of those companies today.

You also don't understand what Apple does if you consider them "primarily" a hardware maker. They do make great hardware, but it's their software that makes people want to buy it, and it's their software, much more than their hardware that puts them on the leading edge.

IBM makes its money in enterprise solutions--it gave up on the PC a while ago. In that realm, IBM (TM1, et al), Oracle (Essbase, et al), HP (HPSC, et al), and Microsoft (...) are the big dogs, and Apple isn't even on the radar.

That being said, this news is great validation for us old heads here on AI. Next up, toppling Dell in Desktop market share.

One more thing: We keep hearing about Windows 'licenses'. That number includes millions of PCs sitting on docks anywhere between here an Hong Kong which aren't being sold. I'd like to hear web stats on the installed operatings systems surfing the web. While I realize Microsoft made their money regardless, to me that's a better barometer of how well 7 is doing in the market.

You've apparently taken off your blinders and replaced them with a blindfold. Anyone who's claiming that Apple is not a force driving the tech industry is completely out of touch. And Google, much as I dislike them, is, unarguably, as well. It's not an issue of where they, or anyone directly competes with Microsoft, it's an issue of which companies are driving the leading edge of technology, and Microsoft is indisputably not one of those companies today.

You also don't understand what Apple does if you consider them "primarily" a hardware maker. They do make great hardware, but it's their software that makes people want to buy it, and it's their software, much more than their hardware that puts them on the leading edge.

It is an issue of directly competing with Microsoft if your talking about threats to Microsoft. There are hundreads of tech companies all invoating in different ways but unless there actually releasing products that compete with MS, it's not really worth the comparison.

Apple also is a mainly a phone and mp3 player manufacturer. They may make great software, but over 75% of their revenue is coming from the sales of iPhones and iPods not Macs. In the same way that Microsoft make Xbox's and Zune players they are still mainly a software producer as most of their revenue comes from selling software.

Apples whole business strategy also dictates that they only operate at the high end of the markets where profit margins are higher. That's why Microsoft has no issue making software for Macs, iPads, iPhones etc, becuase their ultimately not a threat. If anything Apple have made it easier for Microsoft in the phone and tablet market, by raising the amount people are will to spend on these devices so the mass market products that sell for less can affored to spend more on Micrsoft licenses.

It is an issue of directly competing with Microsoft if your talking about threats to Microsoft. ...

If I were, it might be, but, since I wasn't, it isn't. I'm just pointing out that Microsoft no longer drives the tech industry anywhere. They have, in fact, become entirely irrelevant to its direction.

You've apparently taken off your blinders and replaced them with a blindfold. Anyone who's claiming that Apple is not a force driving the tech industry is completely out of touch. And Google, much as I dislike them, is, unarguably, as well. It's not an issue of where they, or anyone directly competes with Microsoft, it's an issue of which companies are driving the leading edge of technology, and Microsoft is indisputably not one of those companies today.

You also don't understand what Apple does if you consider them "primarily" a hardware maker. They do make great hardware, but it's their software that makes people want to buy it, and it's their software, much more than their hardware that puts them on the leading edge.

Let us put this in the following fictional perspective.

What would happen if Google would dissapear and all their products would stop functioning over night?

People would be unhappy that they are forced to use Bing, Yahoo and other minor search engines, but would make transition. Number of small search providers would benefit, new ones would appear. Google Docs would be replaced with MS Online Services, more people would use Open Office, more solutions would likely appear. Same with Picasa, Google Maps, Google Earth; most if not all Google products have alternatives, even if not as popular.

What would happen if Apple would dissapear and all their products would stop functioning over night?

Millions of people would be pissed off but would replace their beloved iPhones with Androids, their Macs with PCs, their iPods with Zens, their iPads with Honeycombs. Number of design pros using exclusively Final Cut would be scr*wed badly and would have to re-train themselves in Premiere, Avid. Some companies still using Apple servers would also face big interruptions in everyday production and some would be forced to bankrupt before they could adapt to Windows or Linux infrastructure; that would cause some ripples in economy but hardly a major one. World would not stop.

What would happen if Microsoft would dissapear and all their products would stop functioning over night?

Well... The world would stop. Majority of government institutions and services, banks, health providers, industries and other businesses, army, police and other law and order services, power providers and distributors, transport companies, Internet and media providers... today are running their respective businesses on Windows server products and Windows desktop products. The world would literarily stop in place, and fix would not come quick and easy.

And you are telling Microsoft has lost it's significance just because Apple made more money in the last quarter? They are much more significant than they were back in late '90 when they were financially dominating Apple, simply because with progress of information technology, world depends more on MS products than they ever did.

Just out of curiosity - how do you think my imaginary scenarios would unravel?

No, I'm telling you that Microsoft made less money than Apple last quarter because Microsoft has lost its significance.

I dont know how that can determined by looking at the number. Id even argue that the opposite is true simply by looking the numbers.

Apples growth far exceeds MS, but it also far exceeds all if not all other established CE and SW companies. MS made record Q2 profits and had making record profits and record Windows sales even during the recession. They even sold the most CE in a two month time frame than anyone in history.

Whether we like it or not (though we should be indifferent to it on an emotional level) and for better or for worse MS is very strong company with a foothold as likely to break free as is Apples foothold. There are plenty of companies that are suffering greatly because of Apple and stand a real chance of being bought out or simply closing up shop.. but MS is not one of them.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

But in every market where Microsoft have ever had any significance Microsoft still made more money than Apple.

And your also saying the company that just set the world record for the fastest selling consumer electorics device has lost significance

Quote:

Originally Posted by solipsism

I dont know how that can determined by looking at the number. Id even argue that the opposite is true simply by looking the numbers.

Apples growth far exceeds MS, but it also far exceeds all if not all other established CE and SW companies. MS made record Q2 profits and had making record profits and record Windows sales even during the recession. They even sold the most CE in a two month time frame than anyone in history.

Whether we like it or not (though we should be indifferent to it on an emotional level) and for better or for worse MS is very strong company with a foothold as likely to break free as is Apples foothold. There are plenty of companies that are suffering greatly because of Apple and stand a real chance of being bought out or simply closing up shop.. but MS is not one of them.

You're right, it can't be determined by looking at the number. You guys are both, despite my previous clarification, still arguing against the position that the number proves significance or insignificance, whereas I'm arguing that MS became insignificant as a driving force in the tech industry a while ago and that Apple making more money than them (or rather, Microsoft not making more money than Apple) last quarter is just one of many symptoms of their decline. (The number of times their name is mentioned in the media vs. the number of mentions Google and Apple get is another)

With all due respect Mel. you do not know what you are talking about with regards to Central America. Sure Nicaragua has problems but Costa Rica , Guatemala and Panama have very vibrant economies and are very focused on education, human rights and there is very little corruption compared to just a decade ago. We are very close to making a big difference in the lives of the impoverished communities and especially in the coffee growing regions there are significant improvements. I'm in constant contact with major interests in that region and I wish you would stop characterizing me as some clueless bleeding heart American who send a few charitable donations. I am significantly involved in this program and I honestly find your flippant dismissal as insulting.

I'm sorry that you find it insulting. But I find what you are saying to be overbearing. Yes, some of those countries have less corruption than before, but the levels are still very high by Western standards. Many years ago, I was in Costa rica, but people who go there a lot on business, tell me that it's not as nice a place as it was 25 years ago. I have no reason to doubt them, as I know them. Guatemala is still a pretty terrible place to be, and Panama is listed along with them, as being one of the most corrupt countries in which to do business.

While I'm sure you're doing good work, I have no idea what organization you work for, or what it is you actually do. Is there a reason for doubting that you're doing much? Yes, unless you are willing to tell us the information we would need to evaluate it, it's all up in the air. You must realize that.

Even here in the US, there are many impoverished people, with billions every year going to help them. Yet, with all of those organizations, and all of the honest people working it, with all of that money, little has been accomplished on that level. It's still the economic times that has a vastly greater effect on poverty than all the organizations, and all their well meaning people and money. You're telling us that in these countries the opposite is true? Hard to believe!

At any rate, this is very far off the topic, and shouldn't have been written here at all. Let's end it.

That's all true, but another aspect you missed out is that Microsoft keeps all their revenue as their at the end of the chain. Apple on the other hand has to pay suppliers for parts and assembly of their products.

I didn't forget. That where the cost of the materials mentioned comes from. When MS has boxed retail software, they have a chain of suppliers, when they OEM their software, as most of it in Windows is, and downloadable software is elsewhere, their chain is short, and cheap.

IBM makes its money in enterprise solutions--it gave up on the PC a while ago. In that realm, IBM (TM1, et al), Oracle (Essbase, et al), HP (HPSC, et al), and Microsoft (...) are the big dogs, and Apple isn't even on the radar.

That being said, this news is great validation for us old heads here on AI. Next up, toppling Dell in Desktop market share.

One more thing: We keep hearing about Windows 'licenses'. That number includes millions of PCs sitting on docks anywhere between here an Hong Kong which aren't being sold. I'd like to hear web stats on the installed operatings systems surfing the web. While I realize Microsoft made their money regardless, to me that's a better barometer of how well 7 is doing in the market.

Well (rubs hands together), discussing MS's financial situation is a very interesting topic, and is actually what this thread is about.

I haven't read the AI article for days now, so if what I say repeats some of it, I'm sorry.

But, here it goes.

MS got pounded for a number of reasons. I'm reading articles from those in the financial industry, and from some analysts who are long in MS, or who report on them on a regular basis. In other words, MS is their beat. Mostly, they don't seem to understand why the stock was beaten down. They point out all the good things that occurred, and somehow, either minimize, or misunderstand the bad, or indifferent.

So what is actually happening to MS?

They've got several divisions, as does Apple and other companies. They break their sales and profits out according to those divisions. Just like Apple and others, those divisions may include areas that are just lumped in for no apparent reason. Sometimes they are lumped in to make some losses disappear, and sometimes because they are so small, that they are put with other small areas for convenience.

So, how did they do on the breakdown, and why does each matter to the company on the whole? Some divisions are much more basic to MS than others. In other words, MS could divest themselves of some of it, and not be affected as a company as a whole, while divesting themselves of others would change the company entirely.

Basically, MS is an operating system company, and a supplier of office software and software tools. All the rest is peripheral to them. That includes the online search, and consumer, entertainment and products divisions.

We can start with the smallest first, to get it out of the way. That's the Consumer, Entertainment and Products division. That's one division, and by far, the smallest. It includes a lot of stuff. Parts are the XBox and licensing and royalties from games and accessories (licensed controllers, etc., and including the Kinect). It includes the Products subdivision, which manufacturers keyboards, mice, cables, etc. The Consumer subdivision includes the Microsoft Marketplace, and all of the sales of music, Movies, Tv shows, and their game network. They move some of that stuff around from time to time, and so not all of it may be where I'm saying it is right now.

All of this came to a sales total of $1.9 billion the past quarter. We don't know exactly how this broke down, but it can be estimated. Estimates for the Products area are about $200 to $300 million. Estimates for the Consumer area are between $150 and $250 million.

Going by that, the Entertainment subdivision which includes the XBox and all that surrounds that would be between $1.350 and $1.550 billion. You know, with all the hype surrounding XBox sales recently, and especially Kinect sales, that's not a lot. In fact it's below 10% of their quarterly sales. In other words, not enough to affect the finances of the company much, one way or the other. Therefor the entire division's profits of $225 million are trivial. Subtract out some profits for the Consumer and Products areas, and the entire XBox area becomes little more than a rounding error in MS's $5.23 billion in profit for the quarter. The other areas in the division wouldn't even be missed if they were discontinued. Sort of like aTv and the areas surrounding that.

Next, we can look to their online initiatives. What's happening there? Well, not much. It's doing very poorly. They lost $726 million on $648 million in sales last quarter, and those losses are increasing. They pay for search results, and pay out much more than they take in. We hear that their search is now up to 30%, and that's looked at as being great growth. But actually, it's not. Why? Because two thirds of that is Yahoo search that's being included with the just over 10% Bing search. This is just not something MS has skill in, and investors are screaming for them to get rid of it. If they did, their profits would jump. But Ballmer (bless his heart), insists they will make a success of it.

Then we have Server OS and Tools. MS did well there. They sold $4.1 billion, very slightly ahead of estimates. Profits were good at $1.4 billion. Services are included in this division, so profits aren't as high as down below.

The Business division, which mostly consists of Office, sold $5.25 billion, while estimates were just $4.9. As we can see with pure software, profits are high, at $3.1 billion. $305 million came from deferred income from the previous quarter from promotions.

But sales in the Windows OS division were $4.4 billiondown 4%, while profits, at $2.8 billion, were down 10%. this is the second quarter in a row where Windows sales and profits were down. Windows 7 was supposed to move Windows sales up a great deal. They didn't. When it first came out, there was a bounce from two sources. The first was the bounce from the receding recession, which took computer sales down with it. The second was Vista, which was also responsible for people putting computer purchases into the future. Well, the ending recession and Windows 7 arrived at about the same time, so we saw a bounce from that. But the bounce seems to have flattened out, as bounces do. Now, the balling is rolling downhill.

So, what can we make from all of this? One thing is that the entertainment division, even though it's now making a profit, isn't accounting for much of the company's sales and profits. No real cheer there, therefor. And it's thought in the gaming industry that console sales may slump from the increased sales of tablets, and their increasingly sophisticated gaming
possibilities. The fact that you will be able to carry your gaming console (the tablet) everywhere you go, and use it where there is no power, is not something traditional consoles can match.

Their online activities are bombing. There really is no other word for it. They've been at this for many years, and in only two did they ever eke out a small profit. And losses are increasing at an alarming rate, $2.5 billion last year, with this year's prospects looking worse, from the first quarter's result. No joy there either.

They did well with server and Tools, but it's not a high growth area, but a modest to medium growth area of about 12% profit increase YOY.

The Business division did the best. Their growth was about 21% YOY, with profits increasing 25%. Office is the biggest monopoly they have (over 95% of office software), with, at this time, no real competition. So this looks really goodso far, but....

The Windows Division, as mentioned, is down again. The truth is that Windows is the driver of every major product for MS. If Windows is going to be flat, or even worse, down for the year, then we've got a lagging indicator to look at. That indicator is Office. While Mac users use Office, it's used to a lessor extent by them. So far, there's no indication that Office will be available for tablets (other than Windows tablets, that is). If that's going to be the case going forward, and it's also true that 30% of tablet sales are coming at the direct expense of a computer sale, as is thought, then with Windows sales down, sometime after, Office sales will follow.

In the longer term, this could even effect the Server and Tools Division. The tools area serves Windows and Server. If Windows is down, so goes tools sales. Eventually, Server sales could be affected as well.

But their profits were higher than expected, doesn't that count for something? As for their profits being over the market expectations of 56 cents a share at 61 cents, well, that's bunk as well. It's true it did come in at 61 cents, but that was because of a 5 cent, one time tax rebate, which the market properly discounted.

I haven't even discussed WP 7!

The problem with evaluating how well a company does is to understand what's important, and what's not. I've followed MS since I bought their stock when the IPO first came out. But I sold it in the latter 1990's, and haven't bothered with it since. It seems that many of those who are talking about how they are startled at the drop in the shares after their report, don't understand the company at all, no matter who they are. This is one time the financial community is right.

What would happen if Google would dissapear and all their products would stop functioning over night?

People would be unhappy that they are forced to use Bing, Yahoo and other minor search engines, but would make transition. Number of small search providers would benefit, new ones would appear. Google Docs would be replaced with MS Online Services, more people would use Open Office, more solutions would likely appear. Same with Picasa, Google Maps, Google Earth; most if not all Google products have alternatives, even if not as popular.

What would happen if Apple would dissapear and all their products would stop functioning over night?

Millions of people would be pissed off but would replace their beloved iPhones with Androids, their Macs with PCs, their iPods with Zens, their iPads with Honeycombs. Number of design pros using exclusively Final Cut would be scr*wed badly and would have to re-train themselves in Premiere, Avid. Some companies still using Apple servers would also face big interruptions in everyday production and some would be forced to bankrupt before they could adapt to Windows or Linux infrastructure; that would cause some ripples in economy but hardly a major one. World would not stop.

What would happen if Microsoft would dissapear and all their products would stop functioning over night?

Well... The world would stop. Majority of government institutions and services, banks, health providers, industries and other businesses, army, police and other law and order services, power providers and distributors, transport companies, Internet and media providers... today are running their respective businesses on Windows server products and Windows desktop products. The world would literarily stop in place, and fix would not come quick and easy.

And you are telling Microsoft has lost it's significance just because Apple made more money in the last quarter? They are much more significant than they were back in late '90 when they were financially dominating Apple, simply because with progress of information technology, world depends more on MS products than they ever did.

Just out of curiosity - how do you think my imaginary scenarios would unravel?

Interesting, but a little confusing. Exactly what do you mean by disappearing? Would all the products that are in place in all of these institutions remain in place, with the companies that promoted them disappearing? If so, then MS's disappearance wouldn't be as disruptive as you state. Everything would go on as it does. There would be major concern, of course, but there are, and would be, companies that service Windows products with tools of all kinds, and there would be years for companies and governments to migrate off these now orphaned products from MS. There would be some disruption, long term, but not nearly as much as you forecast.

To say that they would stop functioning over night is odd, as the company sinking beneath the waves wouldn't make that happen.

And the scenario is really unrealistic, at best. It proves nothing, and has nothing to do with the worth of the various companies mentioned. As it won't happen, it's of no import.

How many companies, governments, and consumers are still using the long discontinued XP? Quite a few. That indicated that a sudden disappearance of MS wouldn't be a disaster. In many companies, it would be a relief, as it would be an excuse to do what they've wanted to do, but couldn't because of competitive pressure.

But in every market where Microsoft have ever had any significance Microsoft still made more money than Apple.

And your also saying the company that just set the world record for the fastest selling consumer electorics device has lost significance

The fastest selling consumer device brought MS about $200 million in sales. And the significance of that to MS's financials is trivial. It will always be trivial. It's an accessory, a controller, with a built in audience of XBox owners.

How about discussing KIn sales, or WP 7 sales, or how well they did in online search.

If you self define something, you can make it look as good as you want to. But it's self defeating.

The fastest selling consumer device brought MS about $200 million in sales

Whoever measures those sales needs to qualify it more. Kinect sales were impressive, but as you note its not a huge gain for MS and compared to pretty much every other non-accessory CE the longevity of the Kinects sale potential is short lived.

It may have beat the iPad during there respective first month or two on the market, but what does it look like after 6 months or a year? I see pretty much every other product growing not fizzling out so while I think the Kinect shows MS isnt insignificant they need to have more than flash-in-the-pan products if they ever want to regain a positive mindshare.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

Whoever measures those sales needs to qualify it more. Kinect sales were impressive, but as you note its not a huge gain for MS and compared to pretty much every other non-accessory CE the longevity of the Kinects sale potential is short lived.

It may have beat the iPad during there respective first month or two on the market, but what does it look like after 6 months or a year? I see pretty much every other product growing not fizzling out so while I think the Kinect shows MS isnt insignificant they need to have more than flash-in-the-pan products if they ever want to regain a positive mindshare.

The Kinect is interesting, and it will be improved. It seems to have caught MS by surprise. At first, when people began hacking it for use with a PC and then, Macs, MS told them that they couldn't do that. They were looking at it solely as a sales instrument for the XBox and software line. Then they wised up, and now are offering an SDK for it. I think it could be useful, but I don't see them selling 40 million a year, as it's too specialized.